Senate progress on the CLARITY Act has been stalled, shifting focus from stablecoin yields to unresolved issues including Sen. John Kennedy’s housing concerns and necessary Republican support for Senate Banking Chair Tim Scott. The Tillis-Alsobrooks compromise resolved a deadlock by allowing rewards based on platform activity but disallowing passive yield on inactive balances, thus preventing crypto firms from mimicking high-yield savings accounts.
Scott seeks unanimous Republican backing—”thirteen of thirteen Republicans”—before advancing to bipartisan discussions in May. However, Sen. Kennedy’s support is conditional upon progress with the 21st Century ROAD to Housing Act, a legislative effort involving his Build Now Act that remains stalled between the Senate and House.
The political leverage held by Kennedy due to his critical vote for Scott underscores how non-crypto issues can impact crypto legislation timelines. Key unresolved matters include software developer protections under the Blockchain Regulatory Certainty Act (BRCA) framework and ongoing debates over ethics and anti-money laundering (AML) concerns, which could further delay the markup.
The compromise on stablecoin yields has eased one major policy conflict but hasn’t guaranteed a committee markup, as other substantial issues remain. Banks’ private worries about potential workarounds to activity-based rewards highlight these tensions, though public language has so far sufficed for Scott’s progress.
With legislative deadlines approaching and the window narrowing post-May, any delay risks closing this cycle’s legislative opportunity. Galaxy estimates a 50-50 chance of passage that diminishs significantly if markup extends beyond mid-May. Meanwhile, Polymarket has seen CLARITY Act approval odds rise from 47% to 64% for 2026.
The global backdrop complicates matters further: Hong Kong granted stablecoin licenses in April 2026, and the EU’s MiCA framework becomes fully effective on July 1. These developments exert pressure on U.S. policymakers as they navigate internal negotiations amidst these international frameworks.
A successful path requires Scott to secure Republican support by addressing Kennedy’s housing concerns or separating his votes from this issue. Concurrently, negotiators must craft software-developer provisions that appease law enforcement without stripping essential industry carve-outs. Achieving bipartisan committee consensus before June is crucial for a summer floor vote window.
Despite Bitcoin’s relative resilience due to existing institutional infrastructure, further delays could undermine Washington’s efforts in fostering domestic crypto capital formation, pushing more activity toward jurisdictions with established regulations. Scott faces the challenge of maintaining his coalition amid political and structural disputes, testing his ability to navigate these complex dynamics within an election-year context.